The Rinehart tactic to date has been to buy shares and, at the same time, question Liontown’s ability to finish and operate its marquee underground lithium mine, Kathleen Valley.
By inserting herself into this deal, Rinehart is setting herself up as kingmaker in Western Australia’s emerging lithium market, alongside fellow Perth mining magnate Chris Ellison.
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The pair has some history in working together and they have resources to see through the volatile lithium price to get a foothold on the future-facing metal used in batteries.
There is a well-documented history of West Australian billionaires squabbling rather than working together, but Ellison and Rinehart have remained the exception to date.
Only a few weeks ago, Ellison’s Mineral Resources cemented its influence over Delta Lithium amid a major boardroom shake-up after which the company’s executive chair stepped down.
Hancock does have its own lithium prospects in the area surrounding Kathleen Valley, including the Mount Ida project that it co-owns with Delta Lithium.
Hancock has hinted at the potential to get into Australia’s lithium downstream processing, where Albemarle has committed to spend $4 billion to become one of the biggest players in that local sector.
Mineral Resources’ Chris Ellison has a history of working with fellow Perth mining magnate Gina Rinehart.
Meanwhile, Rinehart’s Hancock cast doubt on whether Kathleen Valley could be delivered on time and budget, and operated successfully without its help. Hancock suggests its expertise (which is in mining iron ore) would be the antidote to any Kathleen Valley shortcomings. (None of which is an issue for Liontown shareholders, who would have cashed out if the Albemarle takeover was successful.) And Rinehart made much of a relatively small increase in project costs and has declared the project risky.
Fortescue’s Andrew Forrest is another billionaire who has regularly brandished his credentials as a master of mining project development to win support for plays in future-facing metals. He outspent BHP to win Canadian nickel hopeful Noront Resources, but he lost out to Mike Cannon-Brookes to take the reins of Sun Cable.
The Rinehart Liontown scenario has a way to play out, but this takeover by Albermarle probably can’t get done without Australia’s most muscular billionaire getting in on the action.
If it requires her spending another $10 million or $20 million to get it done, that’s small change for Rinehart.
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